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China improves margin trading, short selling rules

Published 01/31/2019, 05:21 AM
Updated 01/31/2019, 05:25 AM
© Reuters. An investor sits in front of a board showing stock information at a brokerage office in Beijing

SHANGHAI/BEIJING (Reuters) - China's securities regulator said on Thursday it would improve the mechanism for margin trading and short-selling, in efforts to satisfy diversified investment needs.

The China Securities Regulatory Commission (CSRC) also said it would adjust risk-management rules for brokerages, encouraging them to make more long-term equity investments.

CSRC said in a statement that Shanghai and Shenzhen exchanges were studying expansion of the securities eligible for margin trading and short selling. In addition, a uniform threshold for margin calls would also be scrapped.

© Reuters. An investor sits in front of a board showing stock information at a brokerage office in Beijing

In a separate statement, CSRC said it would allow brokerages to set aside less provisions for risky assets including main index constituents and exchange-traded funds, allowing them to invest more in equities as part of counter-cyclical measures.

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